Saturday 25 June 2011 05.55 EDT
First published on Saturday 25 June 2011 05.55 EDT

Walking down a busy street in one of the smarter bits of London I spot the crane – a 35-tonne monster taking up half the road, its arm extending into the sky with what appears to be half a house dangling from it. As I get closer I hear 22-year-old Kirstie Finlayson shout "that's my dad's bedroom" as she points at a wall panel spinning 20ft up in the air. If I squint I can see a window and tiny spaces in it for a plug socket and light switch.

Tucker Finlayson, Kirstie's father, is having a three-bedroom, split-level, eco-friendly home built in just two days in a tiny space just off a busy main road in West Hampstead. It has required 12 years of planning, trips to Germany, and a long and gruelling battle with the council to obtain planning permission, but construction is finally underway.

Tucker, a bass guitarist who has played double bass for decades with trad-jazz legend Acker Bilk, had owned a town house on Mill Lane since the mid-1960s but sold it to finance the new-build, cannily keeping hold of the garden. "One night I got drunk with a mate of mine who's an architect, and he suggested I build a house at the end of the garden. It's amazing what one drunken night can lead to," he adds, pointing at the crane, lorry and house being built in front of us.

Finlayson first applied for planning permission in November 1999 and was finally granted it in December 2009. "It became a little game with the council. It was fun. I had to eliminate everything they objected to, one by one, until there was nothing left for them to object to."

He opted for an eco-home, not only because he cares about the environment but because he is having it built for his daughter, making it a home for the future in many ways. It has been manufactured in Germany by Meisterstück Haus (MH), using pre-built panels that can be screwed and bolted together in just days, though the preparatory work before and finishing afterwards will add months to the timeframe.

"I wanted an eco-house without a Grand Designs budget," Finlayson says – citing the popular TV show, where homes of the future are often built at vast expense, as his main inspiration. "I saw an energy-efficient home on the programme but it had cost the guy a fortune so I researched it and found MH, which could do a similar thing much cheaper."

The segments of the home are manufactured at the MH factory in Hamlin, Germany, then transported to the construction site and assembled by a four-strong team of specialist German construction workers. Within three-five days the home is watertight, lockable and secure, with the roof on, all windows in and the entrance door fitted. It can take a further 12 weeks to finish off the interior fixtures and fittings including plumbing and electrics. Everything must satisfy all the usual UK building regulations.

Lesley Gross of MH says construction can often be quicker than the official estimate: "The construction in West Hampstead, for example, could have been done in a day if the crane and lorry had been able to arrive at 7am and stay until 8pm because it's reasonably small – though the structure is far from simple."

Tucker could only get permission for the crane to operate from 10am until 3pm because it required temporary traffic lights and plenty of ensuing disruption – not least to one woman who complains her car is being blocked. MH offers to pay for a taxi to take her anywhere she wants, all day, but she is adamant she wants to use her own car – which means the huge lorry on which Finlayson's house is currently sitting has to be moved back and forth, wasting more time.

MH has built four homes in the UK to date and has two more in the pipeline this year. "Off-site construction – we prefer not to call it prefab – is becoming more and more popular," Gross explains. "Sometimes clients simply want a house built quickly, but we want them to come to us because they want an eco-home. We believe in it and it works, delivering energy cost savings to clients."

Brigid Sundaram lives in the first ever MH home to be built in the UK, in Abingdon near Oxford. "We've been in for about a year and we really love it," she says. "We wanted an eco-build but couldn't find a UK company that could guarantee air-tightness. MH said we could build a 180 square metre, four- to five-bedroom home in two days, which was true, and now we have all the eco technology you could wish for. I wanted to prove to my teenage children that you can have all the mod-cons and still be eco-friendly." About 65% of her hot water is now heated using solar panels.

The house is built using sustainable materials, including kiln-dried and planed timber from a managed forest in Germany. It is well insulated, using Fermacell insulation made of recycled chips, cellulose and water, which is then baked and rolled, making it sand- and fire-proof. The house is screwed together to become air-tight, making it highly energy efficient – and cheap to heat.

MH clients must know what they want long before the panels arrive on-site. "The manufacturers produce everything to your specification, including where you want windows, light fittings, plugs and cables; so once they have been built it's too late to tamper with the panels," Sundaram explains. "If you subsequently decide you want to run a tiny cable somewhere, you shouldn't, because the home might not be airtight anymore. For some people it's no problem to plan ahead and visualise how their home will look, but others need a lot of help to ensure they get it right."

Finlayson employed his friend to design the home and Sundaram to project manage it, flying to Germany himself to pick the finishings he wanted, including floor tiles, toilets and colour schemes. There has been much discussion with his daughter, as he is predominantly building the house for her.

"I wouldn't be able to afford a home here on my own," Kirstie says, "so I'm really lucky that dad has been able to buy somewhere that allows me to remain in the area. I was so young when it all started that I thought it would just be an upgrade to the wendy house I had in the back garden. I had picked out all the tiles I wanted, which were all purple and sparkly as I was only 11, so in some ways it's lucky it took as long as it did."

Finlayson paid around £100,000 to do the ground work, including foundations, architectural plans and other preparatory costs, £100,000 for the house itself, and £100,000 to finish everything off, including plumbing, electricity and furnishings. That's £300,000 on a road where family homes sell for double or triple that, making the project financially as well as environmentally sound. "I just wanted to have fun," Finlayson said, as a friend greets him with a cry of "ah, here's the West Hampstead exhibitionist".

The house is scheduled to be habitable by October, though Kirstie hopes it will be ready by the end of August, at which point she will move in with her father initially. "I'll get some kittens and settle in," she says. "I might move out one day, but I'll never sell it. It's too important. It's dad's legacy to me."